Markets weigh potential impact of Israeli retaliation for Iran’s attack
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The news: Financial markets across the globe are evaluating the impact that a potential retaliation from Israel on Iran could bear, as the Israeli War Cabinet debates its response to the weekend attack.
The numbers: Iran launched an unprecedented missile and drone attack on Israel on Saturday night, launching a barrage of over 300 projectiles including 170 drones, 30 cruise missiles and 120 ballistic missiles. Israel has said 99% of the projectiles were intercepted before landing on Israeli territory.
The context: As the Israeli conflict continues and widens to neighbouring countries in the region, observers are suggesting that oil could pass USD100 ($154.13) per barrel, while a flight to treasuries and safe haven assets could be in the pipeline. Should Israel pursue a counter-strike, setting off a potential counter-strike cycle, crude oil could become a gauge to guide investors on their next moves.
The weekend attack was Iran’s response to a suspected Israeli air strike on the Iranian consulate in Syria on 1 April, which killed a number of Iranian military personnel.
The scale of Iran’s response has triggered significant uncertainty over the stability of the region. While Iran stated that “the matter can be deemed concluded” after the strikes, and the Biden administration has reportedly told Israel that the US would not support a counterattack on Iran, ongoing discussions from the Israeli War Cabinet suggest that an armed response is still on the table.
War Cabinet Minister Benny Gantz said Israel will “exact a price from Iran in a way and time that suits us,” while Itamar Ben-Gvir, Israel’s ultranationalist National Security Minister wrote on X: “We need a crushing attack.” Bezalel Smotrich, Finance Minister, also said that if Israel “hesitates” then “we will put ourselves and our children in existential danger.”
G7 countries also convened on Sunday to discuss the attacks, widely condemning Iran’s weekend attack and calling on all countries to exercise restraint.
